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The
Empowered Committee of State Finance Ministers will
discuss the suggestions put forward by the committee of
state finance secretaries and tax commissioners which met
here today.
The
Centre and states have agreed that both will tax all goods
and services under the dual GST model, which will have a
state GST rate and a central GST rate. The Constitution
will be amended to enable states to tax services.
The
revenue-neutral rates will be determined after estimating
the revenue loss to states in implementing the GST and
their additional income from taxing services.
While
the tax rates will be the same for goods and services,
there could be two slabs both in central and state
set-ups. It means there could be one standard rate for
general category of goods and services and a lower rate
for goods and services (like medicines) which have social
importance.
The
combined GST rate (state and central) will be around 20
per cent. It is likely that the standard central GST rate
could be 11-12 per cent, while the state GST rate could be
8-9 per cent, sources said.
The
combined GST rate under the lower slab could be in the
range of 6-8 per cent. GST will subsume central excise,
service tax, state sales tax and central sales tax with a
few exceptions. The basket of petroleum products will be
kept outside the GST regime for the time being and a final
call on it will be taken later.
Source
: Business Standard - Mumbai, Maharashtra, India, dated
21/01/2009
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